= 3. Demand and Consumer Surplus: Joe's demand for pizza can be described with this function: Q = 30 - 2P where Q is the

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3 Demand And Consumer Surplus Joe S Demand For Pizza Can Be Described With This Function Q 30 2p Where Q Is The 1 (92.85 KiB) Viewed 66 times

= 3. Demand and Consumer Surplus: Joe's demand for pizza can be described with this function: Q = 30 - 2P where Q is the number of slices of pizza consumed per week and Pis the price of a slice. a. Plot the demand curve, with P on the vertical axis and on the horizontal axis. Label the vertical and horizontal intercepts (5 points). b. Joe's total spending on pizza at P = 5 equals 20*5 = 100. His total spending on pizza at P=4 is 22*4 = 88. Without calculating the elasticity of demand directly, what do these total spending figures tell you about Joe's elasticity of demand for pizza between P= 5 and P=4? Explain. (5 points) c. Suppose P=9. Calculate Joe's consumer surplus at this price. (5 points) d. Suppose a rise in the price of tomatoes results in pizza prices rising to $15 (!) per slice. What is Joe's consumer surplus at this new price? (5 points)